Events of September 11, 2001, have highlighted the national need for increased security measures. This includes measures to reduce risks and vulnerabilities associated with key energy supply and distribution facilities. The energy infrastructure of the United States is a potential target for terrorist attacks, and efforts have been underway to provide for added reliability and security. The Michigan Public Service Commission (MPSC) is working with Michigan's energy industries, the Emergency Management and Homeland Security Division of the State Police, and the U.S. Department of Energy (DOE) on the protection of our critical energy infrastructure. The following is a summary of the State of Michigan's plans to prepare for and respond to energy disruptions.

Energy emergencies can occur for a number of reasons. The cause and degree of the disruption, in turn, affects the actions taken in response and the rate of recovery. There are three types of energy emergencies. The first, and most frequent type of energy emergency, is physical destruction to energy production or distribution facilities and equipment caused by storms, tornadoes, floods, earthquakes, sabotage, equipment failure, or fire. The August 2003 Blackout was an example of this kind of emergency caused by equipment failure.

The second type of emergency is a sharp, sudden escalation in the price of oil, usually resulting from a curtailment of oil supplies. According the Energy Information Administration (EIA), world oil demand totaled 85.5 million barrels per day (m/b/d) in the year 2008 and the U.S. consumed 19.5 m/b/d. A shortage, together with the volatility of the oil market, could cause a dramatic and very rapid price increase, as seen following the August 2003 blackout, Hurricanes Katrina and Rita in 2005 and Hurricane Ike in 2008.

The third type of crisis is a sudden surge in energy demand caused by a national security emergency involving mobilization of defense resources. The possibilities of an energy disruption from sabotage have potentially increased in the United States following the events of September 11, 2001. National defense, in a time of crisis, will demand an increase in energy, even if this demand occurred in the midst of a general shortage. Although the regulated natural gas and electric utilities have approved state and federal priority allocation systems, they tend to curtail industrial use to a greater extent than residential use.

Faced with these three types of potential energy emergencies, the challenge is to: (1) develop prudent state energy policies and strategies to minimize future energy emergencies, while (2) develop programs and measures to respond to a variety of energy crises, should they occur.

The focal point for energy emergency planning and response for the State of Michigan is the MPSC, an agency within the Department of Energy Labor & Economic Growth. The energy emergency responsibilities can be grouped into four broad categories:

Monitoring Michigan's energy supply system for the purpose of detecting unusual imbalances that may indicate the potential for an energy emergency, and advising the appropriate state officials in such events.

If an energy emergency requires mandatory state action, the Governor, or at his or her own initiative, may declare a State of Energy Emergency under 1982 PA 191. The Governor may begin ordering mandatory actions following such a declaration.

If the situation worsens, the Governor can declare a State of Disaster. In this case, the primary responsibility of response efforts shifts to the Emergency Management and Homeland Security Division (EMHSD) of the Michigan Department of State Police, although MPSC staff continues to be involved with monitoring, communication, and other support activities. The EMHSD remains in charge of disaster-related activities until the disaster has passed.

If a Michigan emergency or disaster is part of a national emergency, coordination with federal and other state authorities will become important. The DOE is the primary energy agency in the federal government. The DOE is responsible for national contingency planning and response in the event of a nationwide energy shortage.

During natural gas supply disruptions, the local distribution companies initiate Commission-approved gas service curtailment plans designed to prevent or minimize the adverse effects of natural gas shortages within a utility's service territory. The objective of the natural gas curtailment programs is to protect essential human services and to minimize economic disruptions in the state. Commission-approved "Controlled Service Programs" provide gas utilities with the authorization needed to control the attachment of new load during periods of long-term gas shortages or shorter-term periods when reasonably priced gas is not available.

The MPSC also monitors natural gas supplies and the potential for emergency situations. This monitoring and reporting function includes equipment outages, pipeline failures, and other situations not directly resulting in an emergency.

Unpredictable natural gas interruptions resulting from pipeline failures, a natural disaster, etc. within any particular natural gas utility service territory are handled by each company according to its own emergency operating procedures, which balance continuity of service and safety. In addition to its pipeline safety responsibilities, the Commission major responsibility during these emergencies is to monitor and coordinate, if needed, the efforts of local distribution companies, interstate pipelines, intrastate producers, and end users to minimize the effects of the interruption.

The MPSC is responsible for monitoring electrical emergencies affecting Michigan's electric utilities. This includes maintaining contact with utilities regarding storm damage repair, electrical transmission and distribution, generation capability, interconnections, equipment outages and other situations not directly resulting in an emergency and matters related to shortages of fuels used for electrical generation.

"Emergency Electrical Procedures" are plans of action to be used by electric utilities in case of significant mismatches between the supply and demand of electricity. Their purpose is to limit problems within a utility's system and to keep problems from spreading to neighboring utility systems. A mismatch in supply and demand can be caused by immediate outages in the production or transmission network or by a gradual development of demand that finally outstrips available capacity. Gradually developing emergencies permit consideration of a broader range of options. The procedures are designed for system-threatening situations; they are not meant for localized disruptions, such as distribution power lines being out of service.

The procedures relating to capacity shortages have been supplemented as experience and technology gains have occurred, in conjunction with the requirements of the North American Electric Reliability Council (NERC) and the East Central Area Reliability Council (ECAR). These supplements do not change any authorized procedures but, rather, allow utilities to better respond to a given situation within the procedures.

The Chairman of the Public Service Commission has responsibilities for making recommendations to the Governor in the event of a petroleum shortage. The biannual Energy Appraisal and the weekly heating oil and propane residential prices survey provide the means for monitoring petroleum markets. In the event of a petroleum shortage prices would spike and oil suppliers be forced to allocate petroleum product supplies. This means they would limit the amount they supplied to their customers by providing a percentage of the contact volumes or historical purchases. In such event, petroleum contingency plans could be used to assure that essential public and emergency fuel needs could be met. The U.S. Strategic Petroleum Reserve provides a significant safeguard to prevent the need for such actions should an international oil shortage occurs. In addition, an international oil sharing agreement by involving the US, European countries an others countries is intended to mitigate the effects of a major oil shortage by sharing their crude oil supplies.

The state emergency management legislation (1976 PA 390) was enacted in December 1976 and amended in April 1990. This Act replaced Michigan's Civil Defense Act and broadened the scope of emergency management. Act 390 also brought the state into compliance with provisions of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288, as amended), which provides federal assistance in declared (by the President) emergencies or major disaster situations. According to Act 390, the Director of the Department of State Police is responsible for:

Making recommendations to the Governor and implementing the orders and directives of the Governor in the event of a disaster.

Coordinating all federal, state, county, and municipal disaster prevention, mitigation, relief, and recovery operations within the state.

Preparing and updating the "Michigan Emergency Management Plan."

Administering state and federal disaster relief funds.

Assigning general missions to the National Guard or state defense force to assist disaster relief operations.

Maintaining a division within the department to coordinate the pre-disaster emergency service activities of federal, state, county, and municipal governments.

The EMHSD is responsible for the ongoing development and maintenance of the "Michigan Emergency Management Plan" (MEMP) that outlines the general operating procedures of various state agencies in responding to a disaster. The MEMP contains procedures for responding to a variety of disasters, including nuclear power plant accidents, enemy attack, natural disasters and technological disasters.

The Michigan Emergency Management Advisory Council was also established under Act 390 and is composed of up to 15 members appointed by the Governor with the advice and consent of the Michigan Senate. The Council is charged with advising the Governor and the State Police Director on matters of planning for the utilization of state resources and facilities in the event of a disaster.

Departments of state government are responsible for developing the capability to carry out emergency assignments within the scope of their normal area of operations, or as requested by the Director of the Department of State Police. In addition, each department and agency of state government required by the MEMP to provide an annex to that plan must employ or appoint an emergency management coordinator who acts as liaison between the department or agency and the Department of State Police in all matters of emergency management.

Provisions of Federal Public Law 101-440 require submission of a state energy emergency plan to the DOE. This law also requires that the plan include provisions for regional coordination, which differs according to the energy sources involved and is tied to the structure of the energy distribution network.

The National Association of State Energy Officials (NASEO), in coordination with the U.S. Department of Energy. Office of Electricity Delivery and Energy Reliability and the Energy Information Administration (EIA), have developed a program that encourages regional exchange of information. Under the agreement, if states have an energy emergency situation that is multi-state in nature, an Energy Emergency Assurance Coordinator (EEAC) network, as specified by the program, will use e-mail notifications to keep other states in the region informed of the problem and identify corrective actions the states may have to take in response. In addition to exchanging e-mail, Midwest states have held regular energy supply conference calls with the U.S. Department of Energy. The EEAC system is a restricted-access communications network for key State-level personnel to exchange information and coordinate with each other and the Department of Energy during energy emergencies. Several of the MPSC staff are members of the EEAC and have access to the network

Regional electricity coordination is handled in Michigan primarily by the Midwest Independent Transmission System Operator (MISO) which is responsible for assuring reliable and adequate generation and transmission to meet electric service needs. Emergency procedures have been established by MISO. MPSC staff takes part in the MISO stakeholder process.

A government response to a petroleum shortage would be largely coordinated through state energy offices in the Midwest. Given the petroleum distribution network that supplies Michigan, coordination would involve the states of Ohio, Indiana, Illinois, and Wisconsin. Depending on the nature of the problem and the level of response, coordination with the Province of Ontario, Canada, may also be useful.

Natural gas curtailments would be coordinated by local distribution companies and, if more wide spread, by interstate pipelines. As with electricity, regional coordination would involve contacts between natural gas suppliers and state public utility commissions.